Millions thrown away at Fernald

The Cincinnati Enquirer

The company cleaning up Fernald has ordered workers to throw away millions of dollars in new and unused equipment and material to save on expenses and paperwork, according to workers and union officials.

Throwing away the material has been going on since 1993, shortly after Fernald Environmental Restoration Management Co. (FERMCO) took over management of the site, the sources said. The materials include electrical components, piping, steel beams and bolts - some still in their original, unopened packaging, the workers said. Thirty-six FERMCO employees told The Cincinnati Enquirer they were ordered by the company to throw away the materials.

Fifteen of those workers said FERMCO brought them in after their regular shifts or on the weekends and paid them overtime to perform the throw-away work. Most of the workers asked for anonymity, fearing retaliation by FERMCO.

''Taxpayers are footing the bill for millions of dollars worth of brand-new equipment and materials being thrown away,'' said Robert Schwab, president of Fernald's Atomic Trades & Labor Council (FATLC), which represents 13 international unions and more than 700 workers at the site.

''FERMCO supervisors have ordered our workers, including me, to get rid of this new stuff because they say they either lost paperwork for it, or they over-ordered and don't want the government to know what they did, or just because they want to hurry up and clean out a building,'' Schwab said.

Despite reports by the U.S. Department of Energy's Office of Inspector General two years ago that found similar problems, new equipment and materials still are being thrown away, said Schwab. Energy Department officials at Fernald ''who are supposed to be watchdogs over FERMCO, don't even have a clue that this waste has been going on. The (Energy Department) is failing miserably in its oversight and accountability role,'' he said.

In 1994, the Office of Inspector General found FERMCO repeatedly violated department rules by throwing away useable materials and equipment and failed to create a program to monitor, store and protect government-owned property.

As a result, the Energy Department's Fernald staff penalized FERMCO by reducing its performance fee - the company's profits for managing the site.

Gary Stegner, the Energy Department's Fernald spokesman, said that because of a performance fee formula used to determine how much fee to pay or penalize FERMCO during two, six-month award periods in 1994, it was not possible to say exactly how much money the company lost.

Energy Department and Inspector General records reveal that FERMCO continued to receive performance fees based on the amount of waste shipped off-site, even though some of that waste was new equipment and materials.

Asked why FERMCO would be allowed to receive performance fees for improperly throwing away new government equipment and materials - thus boosting its off-site shipping figures - Stegner said, ''The matter is being looked into.''

The Inspector General's 1994 report said after investigators uncovered the wrongdoing, the Energy Department's Fernald officials ordered FERMCO to ''prepare a formal corrective action plan.'' FERMCO officials say new monitoring and inventory policies were created to address the problem.

Despite the company's response to the Energy Department, Fernald workers say FERMCO supervisors continued to order them to throw away new equipment or materials that were not radioactively contaminated or damaged in any way.

''We all know it's wrong to do, but many times it's a choice to either do it or lose your job,'' Gene Branham, FATLC vice president said.

Branham said FERMCO stands to lose performance fees if a project takes too long to complete. ''Inventorying, removing and storing equipment and material takes a lot of time. That's time that could delay a project and result in performance fee being reduced or taken away. That's why FERMCO does this (improper disposal).''

Schwab and Branham said Fernald employees are ready to testify to congressional investigators of the U.S. General Accounting Office (GAO).

U.S. Rep. Rob Portman, R-Cincinnati, and U.S. Senators Mike DeWine, R-Ohio, and John Glenn, D-Ohio called in the GAO to investigate reports of financial mismanagement and safety problems at Fernald detailed in a series of Enquirer articles that began in February. The investigation is ongoing.

Energy Department officials at Fernald, in a written response to Enquirer questions about the allegations that new and unused equipment is being thrown away, said: ''The Department of Energy requires that its contractors comply with all applicable federal property disposal regulations. DOE has held, and will continue to hold, FERMCO to the highest performance standards in the area of property management. Deviations from these standards have been, and will continue to be, appropriately addressed in accordance with the provisions of the contract.''

In a written response to Enquirer questions, FERMCO officials said they ''can find no evidence'' supporting the workers' allegations that materials were disposed of inappropriately.

''Our reviews of the individual examples questioned by The Enquirer have found that the involved major components have been properly excessed and screened for alternate use (sale, transfer to other government agency, etc.)'' FERMCO did not provide The Enquirer documentation to support its claims.

Published June 2, 1996.